Mary Cummins, Real Estate Appraiser, Animal Advocates, Los Angeles, California

Mary Cummins, Real Estate Appraiser, Animal Advocates, Los Angeles, California
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Showing posts with label regulations. Show all posts
Showing posts with label regulations. Show all posts

Tuesday, September 28, 2021

California Assembly Bill AB 948 signed by Governor inre Real Estate Appraisal, Bureau of Real Estate Appraisers, by Mary Cummins

California Bill AB 948 Bureau of Real Estate Appraisers, Real Estate Appraisal , Mary Cummins, Los Angeles, Governor Gavin Newsom, signed, license, continuing education, bias, complaints, race, discrimination

Governor Gavin Newsom just signed California Assembly Bill AB 948. AB 948 modifies and adds regulations for appraising, buying, selling, making loans on real estate in California. The new regulations have to do with any alleged bias from anyone. This includes lenders, mortgage brokers, real estate agents and real estate appraisers. 

It's already illegal to discriminate in real estate and housing per the Fair Housing Act of 1968. This new bill basically just restates that. It also adds new educational requirements in regard to bias. They aren't additional educational hours. They are just specific hours for new applicants and renewals.

The bill amends "Sections 11340 and 11360 of, and to add Sections 11310.3 and 11424 to, the Business and Professions Code, to add Section 1102.6g to the Civil Code, and to amend Section 12955 of the Government Code, relating to real estate."

From the Bill, "LEGISLATIVE COUNSEL'S DIGEST AB 948, Holden. Bureau of Real Estate Appraisers: disclosures: demographic information: reporting: continuing education.

Existing law, the Real Estate Appraisers’ Licensing and Certification Law, creates a Bureau of Real Estate Appraisers within the Department of Consumer Affairs to administer and enforce that law. Existing law requires the protection of the public to be the highest priority for the bureau in exercising its licensing, regulatory, and disciplinary functions.

This bill, among other things, would require the bureau to place on an existing complaint form a check box asking if the complainant believes that the opinion of the value of the real estate is below market value. The bill would also require the bureau to collect specified demographic information, voluntarily provided, regarding sellers, those seeking to refinance, buyers, or an authorized representative in real estate transactions making a complaint. The bill would require the bureau to compile the collected demographic information and report that information to the Legislature on or before July 1, 2024.

This bill would prohibit a licensee from basing their appraisal of the market value of a property on the basis of race, color, religion, gender, gender expression, age, national origin, disability, marital status, source of income, sexual orientation, familial status, employment status, or military status of either the present or prospective owners or occupants of the subject property, or of the present owners or occupants of the properties in the vicinity of the subject property, or on any other basis prohibited by the federal Fair Housing Act.

Existing law requires the Chief of the Bureau of Real Estate Appraisers to adopt regulations governing the process and procedures for applying for a license, including education and experience equivalency, and for renewal of a license, including, but not limited to, continuing education requirements on a 4-year cycle.

This bill would require, beginning January 1, 2023, an applicant to complete at least one hour of instruction in cultural competency, as defined. The bill, as part of the continuing education requirement in order to renew a license or restore a license to active status, would require for each licensee renewing on or after January 1, 2023, at least 2 hours of elimination of bias training. Beginning January 1, 2023, a licensee would be required to complete at least one hour of instruction in cultural competency every 4 years.

Existing law requires that specified disclosures be made upon transfer by sale, exchange, real property sales contract, lease with an option to purchase, any other option to purchase, or ground lease coupled with improvements, of any single-family residential property.

This bill, after July 1, 2022, would require that every contract for the sale of single-family residential real property contain a notice stating that any appraisal of the property is required to be unbiased, objective, and not influenced by improper or illegal considerations. The bill would require the notice to include information regarding reporting biased appraisals to the financial institution or mortgage broker that hired the appraiser or the Bureau of Real Estate Appraisers. The bill would also require the notice to be delivered by a licensed person, as defined, refinancing a first lien purchase money loan secured by residential real property containing no more than 4 dwelling units either prior to, or with, the loan estimate or the mortgage loan disclosure statement.

Existing law, the California Fair Employment and Housing Act, prohibits housing discrimination, including discrimination through public or private land use practices, decisions, or authorizations, and based on specified personal characteristics. Existing law makes it unlawful for any person or other organization or entity whose business involves real estate-related transactions to discriminate against any person in making available a transaction, or in the terms and conditions of a transaction, because of specified personal characteristics.

This bill would make it unlawful for any person or other entity whose business includes performing appraisals of residential real property to discriminate against any person in making available those services, or in the performance of those services, because of race, color, religion, sex, gender, gender identity, gender expression, sexual orientation, familial status, source of income, disability, genetic information, veteran or military status, or national origin."

Link to actual bill below.

https://leginfo.legislature.ca.gov/faces/billTextClient.xhtml?bill_id=202120220AB948

This bill appears to be a political response to a couple of California media articles about alleged bias in real estate appraising. One article was about Cora Robinson who filed a complaint. Based on my research the first appraisal was within the range of market value. I did a FOIA request to get a copy of the investigation results and will post them here when they are available. Another article was about Saleem Shaheed. This was another case where the first appraisal was within the range of market value. Shaheed did not file a complaint. 

September 21, 2021 Marcia Fudge the head of HUD stated that there were few complaints for racial bias in appraising. I looked at the HUD stats and agree. A lot of the outrage in the media is from a handful, about five actually, alleged cases of alleged low appraisals caused by alleged racial bias. I researched the five cases and wrote articles in this blog about them. The first appraisals were within the range of market value. They were not low. The markets were quickly appreciating. The second appraisals came in over market value because the second appraiser used comps outside of the area which were not true comparables. I will be posting the results of the FOIA requests of the two complaints filed here.

A lot of these recent claims of alleged racial bias stem from the change in political climate related to George Floyd. "The country is in a time of racial reckoning, heightened by a summer of protests against systemic racism and police brutality following the death of George Floyd in police custody." Floyd's death "sparked the largest racial justice protests in the United States since the Civil Rights Movement." "According to data from various sources, the Black Lives Matter movement is now the largest movement in US history." While racism exists and must be banished from our nation the pendulum has now swung to the extreme side. In this new light anything and everything is automatically "racist" today before even looking at the facts.

It light of everything that is currently happening I believe real estate professionals need to educate their clients and the public about the real estate appraisal, lending and selling processes. Generally the person reading the appraisal report is not the client. The client is the AMC and the lender. The report is made for real estate professionals and not lay people. I think it's a good idea for appraisers to add language for lay people who will probably end up reading the report. Some of the complaints about reports that I've read clearly show that the reader doesn't understand market value or the underwriting process. I believe this has caused some to assume that any value they don't like must be "racism" when it's not. 

Mary Cummins of Cummins Real Estate is a certified residential licensed appraiser in Los Angeles, California. Mary Cummins is licensed by the California Bureau of Real Estate appraisers and has over 35 years of experience.


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